In the field of binary options trading, the strike price is a level that a trader predicts for the market to rise or fall. It is a theoretical market price that is quite popularly being used in binary options trading journeys.
Each asset or contract has its own binary options strike price. It depends on you to decide the selected contracts that you wish to trade with. You can then check the strike prices of those assets. And then decide whether you want to buy or sell those contracts.
Strike Prices in action
For general binary options trading, you should buy a contract or asset if you can predict that the market will be at a higher level than that of the strike price. And you need to sell the contract or asset if you predict that the market will go downwards, below the strike price.
In such scenarios, the potential outcomes are as follows:
After the expiration time, if the price is above the strike, the person with the correct prediction will get the profit payout. And the person who predicted the opposite will get $0. In fact, the buyer gets the profit here, and the seller incorporates loss.
After the expiration time, if the price is below the strike, then the seller will get the profit payout. And the buyer will get $0.
Different platforms have different indications for making predictions. Some call it to buy/sell, while some call it high/low. It varies from platform to platform, but the algorithm is universal for binary options trading.
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